Sweden's Wallenstam H1 profit rises on property value gains

Overview

• Sweden property company's H1 rental income was flat yr/yr, profit after tax increased

• Company maintained 97% occupancy and 91% commercial lease renewal rate

• Investment in new construction and reconstruction rose to SEK 1,388 mln from SEK 1,052 mln

Outlook

• Company says occupancy rate remains high at 97% and commercial lease renewals at 91%

• Wallenstam says financial position remains strong and key performance indicators are stable

• Company expects continued development of properties and projects during rest of yr

Result Drivers

• HIGH OCCUPANCY AND TENANT RETENTION - Co said stable results were supported by 97% occupancy rate and 91% commercial lease renewal rate, per CEO Hans Wallenstam

• PROPERTY VALUE GAINS - Positive changes in value of investment properties contributed to profit

• INCREASED DEVELOPMENT INVESTMENT - Investment in new construction and reconstruction rose to SEK 1,388 mln from SEK 1,052 mln

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 3 "hold" and 3 "sell" or "strong sell"

• The average consensus recommendation for the real estate rental, development & operations peer group is "buy."

• Wall Street's median 12-month price target for Wallenstam AB is SEK42.00, about 4.5% above its July 3 closing price of SEK40.18

• The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 21 three months ago

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